Monday, January 28, 2008

U.S. intervenes in whistleblower suits against NJ hospitals

The federal government has intervened in two whistleblower lawsuits alleging Medicare fraud against three New Jersey hospitals, according to an AP story published January 25, 2008 in Forbes. The hospitals named in the suits are Robert Wood Johnson University Hospital, Barnert Hospital and Bayonne Medical Center.

The suits, filed under the qui tam provisions of the federal False Claims Act, allege the three hospitals fraudulently inflated bills they submitted to Medicare. The Dept. of Justice press release states that this inflation led to enhanced reimbursement through the "outlier payment" program, designed to compensate hospitals and other health care providers in cases where the cost of care is unusually high.

Both Barnert Hospital and Bayonne Medical Center have filed for bankruptcy protection.

Thursday, January 24, 2008

Big Dig contractors agree to pay $458 million

Bechtel/Parsons Brinckerhoff (B/PB) and design consultants will pay the United States and the Commonwealth of Massachusetts a total of $458 million to settle allegations of "gross failures" in the oversight and management of the construction of Boston's Central Artery Tunnel, known as the Big Dig.

B/PB will pay $407 million for mistakes that resulted in the use of defective concrete, thousands of leaks in Big Dig tunnels and a ceiling collapse that killed one woman. Design consultants who made mistakes in construction drawings will pay the remaining $51 million of the settlement.

Over $23 million of B/PB's payment will go to the United States to settle federal False Claims Act allegations and over $40 million to the Commonwealth of Massachusetts to settle state False Claims Act allegations.

The announced settlement drew criticism in the January 24, 2008 issue of the Boston Herald.
Critics were displeased with the fact that B/PB will escape criminal charges; will only be held liable in case of a “catastrophic” incident within the next 10 years; and that liability for such an incident would be capped at between $50 million and $100 million.

Tuesday, January 22, 2008

Louisiana hospital settles fraud allegations for $1.9 million

Lafayette General Medical Center will pay $1.9 million to settle allegations that it defrauded federal and state health plans by billing for unnecessary cardiology procedures, according to the January 11, 2008 press release from the U.S. Attorney's Office.

The False Claims act suit alleged that LGMC knew that a physician was performing medically unnecessary angioplasties, angiograms and stenting procedures yet deliberately failed to address the problem. The suit was brought under the qui tam provisions of the act by a cardiologist who approached federal authorities claiming that Dr. Mehmood M. Patel was routinely endangering the health and safety of patients by subjecting them to unnecessary and inappropriate medical procedures.

Our Lady of Lourdes Regional Medical Center reached a similar settlement with the Justice Department in 2006, agreeing to pay $3.8 million to settle a False Claims Act lawsuit related to Patel's work.

New Jersey governor signs state False Claims Act

Governor John Corzine signed the New Jesrsey False Claims Act on January 14, 2008, according to a press release on the governor's site.

The law, which will take effect 60 days after the signing, has a qui tam provision that allows whistleblowers who discover fraud to file suit on behalf of the state. A party convicted of violating the False Claims Act is liable for treble damages as well as civil penalties.

We had reported on the bill's passage by the state Senate on January 8, 2008.

Tuesday, January 08, 2008

New Jersey False Claims Act passes Senate

The New Jersey Senate has passed a state False Claims Act, according to a January 7, 2008 article at

The bill, sponsored by Senators John H. Adler and Joseph F. Vitale, will now go to the state Assembly.

The proposed law would allow private individuals in New Jersey to bring an action, either by themselves or working with the State Attorney General, against any person who knowingly causes the State to pay a false claim. The bill provides for civil penalties, between $5,000 and $10,000, for each verified count of a false claim, and imposes damages of up to three times the cost of any losses the public entity would have sustained because of the false claim.

Massachusetts limo company will repay tolls

Massachusetts Attorney General Martha Coakley announced that the A&M Limosine Service Co. will pay $65,000 to resolve charges it underpaid tolls for airport tunnels, according to a January 3, 2008 report in the Worcester, Mass., Telegram & Gazette.

The suit was brought under the state's False Claims Act and alleged that the company had drivers use personal toll transponders linked to Boston addresses to pay 40-cent resident discount tolls instead of the $4.50 commercial tunnel toll.

Thursday, January 03, 2008

Arkansas doctor settles whistleblower suit and pleads guilty to accepting kickbacks

Patrick Chan, an Arkansan neurosurgeon, pleaded guilty to receiving kickbacks from a medical supply saleswoman in exchange for performing surgeries using her company's supplies.

Chan also settled a whistleblower lawsuit for $1.5 million that was under the federal False Claims Act.

Arkansas Business reported on January 3, 2008 that Chan will pay $1.049 million to the U.S. government, $101,000 to the state of Arkansas and $350,000 to the whistleblower.

Road contractor settles federal whistleblower suit

Gohmann Asphalt of Clarksville, Ind., will pay $8.2 million to settle allegations that the company falsified tests on asphalt samples on raods and highways in Kentucky and Indaina.

A former employee brought the suit under the qui tam provisions of the Federal False Claims Act. He alleged that company employees fraudulently swapped asphalt samples to increase payments to the firm on government projects.

In addition to repaying $8.2 million from work it completed on 132 federally funded road projects in Indiana and Kentucky, Gohmann will refund the $5.3 million bonus it received in 2001 for the early completion of work on Interstate64 in Kentucky, according to a December 11, 2007 article published in the News & Tribune.